Ron Kalifa, the author of last year’s Review into the UK FinTech landscape, has spoken about the growth funding gap to CityAM.
He says the answer could be for pension funds to back growth-stage FinTechs.
Currently, according to the Kalifa Review, a “£2bn FinTech growth capital funding gap” exists here in the UK.
Kalifa recommends that some of the UK pension scheme (worth about £6trn) could be used to fund high growth FinTechs.
What does this mean?
Currently, pension funds are largely prevented from backing venture capital or private equity funds, due to fees that exceed a cap of 0.75% they must adhere to. The Government is currently considering changing this cap, and Kalifa says he hopes there is an appetite for this.